Healey says the £2.6bn scheme will pay households in council-tax bands A to D directly this winter; Scotland, Wales and Northern Ireland have been offered funding to adopt it.
UK chancellor John Healey announced a £100 winter energy payment for 20 million households in England’s council-tax bands A to D in his 28 October Budget. The government plans automatic payments from the start of January 2027 into the bank accounts households use to pay council tax.
In remarks carried by the Guardian, Healey said rising energy bills amid conflict in the Middle East worried families and that the payment would ease pressure through the colder months. The Office for Budget Responsibility, the UK budget watchdog, said energy prices had risen significantly since its March forecast, reducing households’ income after inflation.
The BBC’s payment guide says the government has made local councils responsible for arranging payments to eligible people who cannot receive the money through the account used for council tax. These include students in qualifying private homes or flats, households exempt from council tax, and people who pay by cash or other methods.
Students living in halls will not receive the payment because student halls are not in council-tax bands A to D. Students living in properties within those bands qualify even though students do not pay council tax.
The payment is cash paid into bank accounts, rather than a credit restricted to energy bills, so recipients can choose how to spend it.
Analysis
Council-tax bands group properties by value. Bands A to D are the first four bands, so eligibility follows a property’s band rather than a household income test. Households in higher bands fall outside that rule.
The government plans a 26 November start for suspensions covering 101 food and agricultural products, including garlic, gherkins and plant-based milk.
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The Resolution Foundation thinktank estimates that 80% of households in England qualify. Yet it estimates that 1.4 million households in the poorest half—one in eight of that group—would miss out because they live in higher-band homes. The foundation called the support poorly targeted and the exclusion unacceptable.
| Measure | Amount | Eligibility and delivery |
|---|---|---|
| Winter energy payment | £100 | For households in England’s council-tax bands A to D. Bank payments are due from January 2027, with councils arranging alternatives where needed. |
| Warm Home Discount | £150 | A separate one-off electricity-bill discount applied by an eligible household’s supplier, not paid into a bank account. Eligibility differs by location. |
The government’s Warm Home Discount guidance says suppliers usually apply that discount automatically. Some eligible people in Scotland may need to apply directly to their supplier.
The Budget also plans to remove standing charges from household gas bills. These are fixed daily fees paid regardless of gas use. Their costs would move into the price per unit of gas instead, changing how gas costs are charged rather than forming part of the £100 payment.
Healey intends to ask energy regulator Ofgem to remove the charge for around 23 million homes in 2027 or as soon as possible afterward. The Treasury estimates that moving the costs to the unit rate could save 60% of households an average of £45 a year.
Healey put the payment scheme’s cost at £2.6bn, in remarks carried by the Independent. He said the surcharge on banks’ profits would rise from 3% to 6% to fund immediate energy-bill support. The increase is planned for 15 months, from 1 January 2027 to 31 March 2028.
Council tax operates in England, Scotland and Wales. Healey offered Scotland, Wales and Northern Ireland equivalent funding and encouraged their governments to adopt the £100 payment. Their decisions will determine whether households there receive it under these arrangements.
For England, the government says it will issue guidance on how councils should arrange payments outside the automatic bank-account route. Those detailed instructions have not yet been published.
The Budget preserves the £20,000 annual cash ISA allowance and proposes a 24% rate on savings and rental income for basic-rate taxpayers from April 2027.
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Under the announced Your First Home terms, eligible first-time buyers purchasing qualifying new-build homes in England can seek a 20% equity loan with a deposit from 2.5%. Applications are scheduled to open in February 2027.
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